Since 2008, an independent look at challenges and opportunities in sports and financial investing, with occasional diversions as my mood takes me. Nothing is for sale, and this not a Profit and Loss report either. They're boring.

Sunday, 15 March 2015

I wrote in my last post that in my opinion, the idea of a betting bank is conceptual and of limited use. In my experience, most bettors in practice do not ring-fence their betting bank from other funds. They over stake, blow their initial bank, and come back the next day with a new bank- which is not really the idea of a betting bank. Or perhaps despite the fact that there are funds remaining, the bettor or trader convinces himself that the system isn't working and abandons the strategy. As I mentioned before, discipline and handling losing runs is certainly one of the biggest challenges a serious bettor faces.

For Tage "a betting bank is very real and at the heart of my staking strategy". Tage is something of a rarity though, coming from a background in statistics and taking a very statistical approach to his investing. Not exactly your common or garden bettor.Tage's email continued with:

Consider a casino game where the setup is fixed, all probabilities are unchanged throughout.

One issue here is “The Gamblers Ruin” problem.Given a bank B there is a certain probability P to go bankrupt placing one unit per play.

Unfortunately no one has yet found the function B = f(P)

Anyone playing a negative expected value game will over the long-term, lose. The occasional casino visit for entertainment purposes is something I am not averse to - indeed a few hours at the craps table with friends and drinks for tips is a lot of fun and by sticking with the least negative expectancy bets plus the odds (fair odds) bets, you have a reasonable chance of walking away a winner. Long-term though, it's not a viable money-spinner. No staking strategy can turn a negative expected value game into a profitable one. Betting to level stakes is the true test, and while Kelly is proven to be the optimal strategy for maximising profits for a positive expected value game, no staking strategy in the world can help you turn a negative expectancy positive in the long run.Tage provided a link to an academic paper from the University of Utah (a state not known for its love of gambling) and while these studies are always interesting, or at least the conclusions are, I don't believe the mathematics within them is understood by too many gamblers.

Of course this is well known!For me, successful betting starts with finding an edge, and this is the hard part. Once you can generate selections with a high degree of confidence in their long-term profitability, then you can play around with staking methods to increase your profits.The FTL this season once again shows the difficulty in finding a source for profitable selections. While the majority of names in the table are, or at least were, relatively unknown, there are 11 services on display out of 33 entries. At the midway point of the weekend, and thus the numbers are estimates in most cases, just four of those are in profit. The usual disclaimer here that the numbers are generated from Pinnacle Sports prices and can usually be beaten. The 11 are down a combined 112.22 points and the entry with the highest ROI% is the formulaic Bundeslayga whose selections are based on the market's prices and not generated from a model. In other words, a system that should not work, but which has for some time now.

The XX Draws struggled last season due to the draw drought, (23.38% strike rate for draws), but this season is benefiting from the improved Strike Rate of 26.93% in the Big Five leagues. Football Elite are currently up, though not hugely, while other respected services are struggling. The Cassini Value selections are doing the opposite of the XX Draws, and following a great season (winning the FTL last season) with an awful season. The end of season inquest is likely to point the finger, at least in part, to the high percentage of draws in Serie A this season, but it shows the importance of not having all your eggs in one basket. In Ian Erskine's defence, his selections are mostly intended for trading, lay the draw for example, but the overall picture isn't pretty.In regard to Betslayer's claim to know that a certain professional UK bettor uses goal times, he had this to say:

I don't need to back it up, I'm a professional bettor and I use goal times.

I know of at least two others who use it as part of their analysis. BUT the key is, its not the soft data that Jonny uses such as in the last 10 Liverpool games with a goal in 0-20 10/10 BTTS etc etc Thats no better than formlabs or other bookmaker backed data suppliers.

Of course there's no need to back the claim up, unless you want the claim to be taken seriously. Saying that you 'think' and then 'know' something with absolutely no credible evidence to support the claim means it is at best going to be taken with a pinch of salt. As the Sagan standard says "Extraordinary claims require extraordinary evidence".The claim to be a professional bettor could do with some clarification also. While the intent is no doubt to imply a hugely successful individual raking in thousands each week, of which there are certainly a few, when I've heard this claim before, the truth is usually that the 'professional' is unemployed, (perhaps by choice, perhaps not), and is collecting dole money, which is more likely to be funding their 'professional' gambling career than supplementing it. Which is not the definition of 'professional'.Betslayer is Rob, one of the people behind the BetOnTarget site:

If you want to look at the markets when the score is 1-2 at half time you can do that too, or how about finding out what the probabilities are when the score was 1-2 at half time and went to 2-2 between the 70th and 80th minute on a match in Portugal’s Primeira Liga ? It’s all there at the push of a button… You ask our engine questions and it gives you answers, it’s up to you what questions you ask and how you use those answers. It is not designed around a certain strategy, it is designed to give it’s users access to an expanding and potentially limitless number of strategies.

This is a constantly evolving project and has always been a joint venture between a programmer, myself, and a trader, Rob.

Once again, how is historical data from independent events useful in any way as a predictor for the future? It all sounds very scientific, but so can astrology to a gullible audience. I'd love to be told how independent events can magically become dependent events, but it'll never happen however much the project evolves. What isn't immediately clear is what makes BetOnTarget any different from "formlabs or other bookmaker backed data suppliers". Data is data, and goal times are in the public domain. And useless.Independent EventsWhen two events are said to be independent of each other, what this means is that the probability that one event occurs in no way affects the probability of the other event occurring. An example of two independent events is as follows; say Crystal Palace scored the opening goal between the 21st and 30th minutes of an FA Cup game at Dover and you're interested in betting on the Bromley v Sutton United game in three months time. The probability of goals in this Conference South game is in no way influenced by the goal at Dover.

Dependent EventsWhen two events are said to be dependent, the probability of one event occurring influences the likelihood of the other event. For example, you open a deck of cards and remove an ace. You then draw a card, and the probability of drawing an ace is less than any other rank because you removed an ace earlier. Now, if you were to put that pack aside, and open a brand new pack, the probability of drawing an ace here is not altered by the first ace being removed. It really is that logical.

I'm also skeptical that a 'professional' would use historical match data between two clubs as shown in the example above, and waffle about 'some good value'. What happened 8 matches (four years?) ago between the two clubs has no relevance to a game today.

Since when has anyone HAD to bet? "Worth a look". "There could be some value in backing Sunderland".These wishy-washy comments suggest opinions that are not supported by any data. They might make good filler for a match preview, but from a successful full-time bettor, I think we would see some meaningful data. Speaking of nonsense, my attention was drawn to some more Police activity with our old friend. As usual, the comment doesn't appear to be written in English, and makes little sense, and for the record, I have been waiting over a year for the dreaded knock on my door:

footnote: On tweeter very recently I received tweets implying that I was the cause of the entity who had tweeted me to lose them £10 000 pounds via betting.

This is obviously a very serious allegation and I am unaware that I have ever “engaged” with anyone for the purpose of a betting “venture”

They refused to provide further details so I have a meeting lined up with the Police in an attempt to find out who is behind the claim in order to find out what the motive of the tweets are

To come full circle and return to Tage, he has long advocated that tipsters simply send out their prices on matches as early as possible, and let the subscriber worry about finding the value. Sending out the selection with a suggested or 'should be attainable' price without mentioning the 'true' price is a practice that could be easily improved upon.Finally, on a much longer post than originally intended, back to the Utah paper, and this caught my eye:

Also, the odds bet can be made not just for β units, but for an amount sufficient to win β units. An unusual feature of this bet is that m3 < 0 for all β ≥ 0, that is, its distribution is skewed to the left. Gamblers do not usually like to make bets in which the potential loss exceeds the potential win, which may help to explain why this bet is relatively unpopular.

That last sentence seems poorly researched, although 'gamblers' probably refers here to those less sophisticated than your typical Green All Over reader who falls closer to the upper sophisticated investor end of the gambler-investor spectrum than the more naïve Jonny / Betslayer end.The observed Favourite-Longshot Bias shows that gamblers would be better off backing at shorter (including odds-on) prices.Except in the Bundesliga of course!

About Me

I have had a life-long interest in sports and after studying Pure Mathematics with Statistics at secondary school, have been fascinated by odds and probability.
The first system I came up with was a simple one - back the favourite and double up after a loss until a winner. Simple enough in theory, and I told my Dad about it. Not being a betting man himself, he ran it by some of his colleagues, and came home to tell me that it wouldn’t work because a long losing run would mean that the bank would be empty. Then there was always the possibility that the winner would be returned at odds-on, meaning that the total returns would not match the outlay. Not what a ten year old wants to hear! Only slightly daunted, I then went on a search for the Holy Grail, the secret to riches that I knew was out there somewhere. Finally in 2004 I stumbled across an article about Betting Exchanges and four years on I am able to make a steady profit. I am at that age where I can start thinking about retirement and anything I make from trading sports will bring that day forward.